The Company Profile
Basic information about Caterpillar Inc.
Stock Price Trends
Caterpillar Inc. stock price trends estimated using linear regression.
Financial Statements
Income Statement
The income statement (statement of earnings) reports on the performance of Caterpillar Inc., the result of its operating activities.
Statement of Comprehensive Income
Comprehensive income is the change in equity (net assets) of Caterpillar Inc. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.
Balance Sheet: Assets
The assets reports major classes and amounts of resources owned or controlled by Caterpillar Inc..
Balance Sheet: Liabilities and Stockholders’ Equity
The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.
Cash Flow Statement
The cash flow statement provides information about Caterpillar Inc. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on Caterpillar Inc. balance sheet.
Common-Size Financial Statements
Common-Size Income Statement
Income statement components (revenues and expenses) shown as percentage of total sales.
Common-Size Balance Sheet: Assets
Assets components shown as percentage of total assets.
Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Liabilities and stockholders’ equity components shown as percentage of total liabilities and stockholders’ equity.
Analysis of Financial Ratios
Analysis of Profitability Ratios
Measures the income of Caterpillar Inc. relative to its revenues and invested capital.
Analysis of Liquidity Ratios
Measures the adequacy of Caterpillar Inc. cash resources to meet its near-term cash obligations.
Analysis of Solvency Ratios
Examines Caterpillar Inc. capital structure in terms of the mix of its financing sources and the ability of the firm to satisfy its longer-term debt and investment obligations.
Analysis of Short-term (Operating) Activity Ratios
Evaluates revenues and output generated by the Caterpillar Inc. assets. Operating performance ratios describe the relationship between the Caterpillar Inc. level of operations and the assets needed to sustain operating activities.
Analysis of Long-term (Investment) Activity Ratios
Measures how efficiently Caterpillar Inc. generates revenues from its investments in fixed or total assets.
DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
An approach to decomposing Caterpillar Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.
Analysis of Reportable Segments
Caterpillar Inc. operates in 4 segments: Construction Industries; Resource Industries; Energy & Transportation; and Financial Products.
Analysis of Geographic Areas
Caterpillar Inc. operates in 2 regions: Inside United States and Outside United States.
Relative Valuation
Common Stock Valuation Ratios
Relative valuation technique determine the value of Caterpillar Inc. by comparing it to similar entities (like industry or sector) on the basis of several relative ratios that compare its stock price to relevant variables that affect the stock value, such as earnings, book value, and sales.
Enterprise Value (EV)
Enterprise value is total company value (the market value of common equity, debt, and preferred equity) minus the value of cash and short-term investments.
Enterprise Value to EBITDA (EV/EBITDA)
To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.
Enterprise Value to FCFF (EV/FCFF)
Free cash flow to the firm is the cash flow available to the Caterpillar Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.
Price to FCFE (P/FCFE)
Free cash flow to equity is the cash flow available to Caterpillar Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.
Discounted Cash Flow (DCF) Valuation
Capital Asset Pricing Model (CAPM)
CAPM is a theory concentrated with deriving the expected rates of return on risky assets based on the assets’ systematic risk levels. Systematic risk is the variability of returns that is due to macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.
Dividend Discount Model (DDM)
The dividend discount model (DDM) is a technique for estimating the value of a share of Caterpillar Inc. common stock issue as the present value of all future dividends.
Present Value of Free Cash Flow to Equity (FCFE)
The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.
Long-term Trends
Selected Financial Data
since 2005
Main items of Caterpillar Inc. financial statements.
Net Profit Margin
since 2005
Caterpillar Inc. indicator of profitability, calculated as net income divided by revenue.
Operating Profit Margin
since 2005
Caterpillar Inc. profitability ratio calculated as operating income divided by revenue.
Return on Equity (ROE)
since 2005
Caterpillar Inc. profitability ratio calculated as net income divided by shareholders’ equity.
Return on Assets (ROA)
since 2005
Caterpillar Inc. profitability ratio calculated as net income divided by total assets.
Current Ratio
since 2005
Caterpillar Inc. liquidity ratio calculated as current assets divided by current liabilities.
Debt to Equity
since 2005
Caterpillar Inc. solvency ratio calculated as total debt divided by total shareholders’ equity.
Total Asset Turnover
since 2005
Caterpillar Inc. activity ratio calculated as total revenue divided by total assets.
Price to Earnings (P/E)
since 2005
The P/E ratio tells analyst how much an investor in Caterpillar Inc. common stock pays per dollar of current earnings.
Price to Operating Profit (P/OP)
since 2005
Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit.
Price to Book Value (P/BV)
since 2005
The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return.
Price to Sales (P/S)
since 2005
An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative.
Analysis of Components of Financial Statements
Financial Reporting Quality
Aggregate Accruals
Financial reporting quality relates to the accuracy with which Caterpillar Inc. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of Caterpillar Inc. earnings.